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Comment by SmellTheGlove | Hacker News Reader

Neither side was willing to shoulder the fees. Eventually one side did, but threw this in to mitigate any ill feelings as a result of the negotiation and contract terms. This isn't instead of a fee split, this is Hootsuite blinking first but throwing in an additional term meant to be fun and healthy to the relationship. A $450 dinner every $100k in revenue is de minimis (or whatever is below that, I slept through law school latin) and to me was a great solution to the relationship aspect.

This is neither a business courtesy nor a kickback. It's a negotiated term in the contract.

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Hootsuite could have used taking on the CC fees as leverage for obtaining a concession on a different point. Instead they negotiated a clause that benefits individuals, and not the company.

If I were an investor in a company and they accepted suboptimal contract terms because of terms that benefited individuals and not the company, I'd be unhappy. If they promoted it as a best practice, I'd be livid.

We can only go by what's written in the article, but it sounds like the CC fee was the only item at issue. Hootsuite was willing to budge on it and essentially had the vendor put business development activities into the contract. I agree that it does start to look like personal services, and I'd not be happy about it if it were something larger. But the vendor was buying dinner every once in a while anyway - why do you think they agreed to it? And while Hootsuite maybe could have leveraged that term for something else in the contract, it sounds like they're very happy with their end of this. It'd be one thing if the Vendor was promoting this, but it's the party that conceded the larger term thinking it beneficial. It's certainly a YMMV situation.

$450 is not a de minimus expense on $100k revenue. Keep in mind that they are negotiating the 2 percent credit card fee. $450 is a significant fraction of that $2,000.

It is less than half a percent of the $100k and quite honestly an expense the vendor would likely spend anyway on business development to maintain this relationship anyway. Hootsuite feels like they're getting something, the vendor is agreeing to something they'd probably pick up the tab for anyway, and both sides feel like they gained something.

The credit card fees really don't enter the frame for me. Hootsuite blinked and conceded that term.

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